Fewer Bank Repos Available… Why?
In February 2017, according to the statistics provided by Equator.com, an authority on real estate statistics, there were only 3 closed bank repos last month. Where have all the foreclosures gone? Here are a three reasons I believe there are fewer bank repos for sale.
- Higher Home Prices = Greater Equity
Now that home prices have rebounded, most homeowners that were struggling can now sell their homes and walk away with some equity rather than letting the bank foreclose.
- Loan Modifications = Fewer Foreclosures
Many struggling homeowners were offered loan modifications and have been making the payments. I recently sold a home where the seller was on a loan modification. His home sold for a record price in his neighborhood and was able to walk away with equity and retire out of state because he had equity and the bank didn’t foreclose.
- Banks Selling Default Loans to REITs and Hedge Funds = Fewer Bank Repos
Banks really don’t want to foreclose. It’s bad for their books and for their reputations. So in order to avoid them, many of them are packaging up their defaulting loans and selling them in bulk to Real Estate Investment Trusts (REIT) and Private Hedge Funds who are buying 100s and 1000s of loans at a time. Rather than foreclosing and selling on the open market, the companies are turning them into rentals after foreclosure. Yes, they are foreclosing on them, but they aren’t selling them like the banks did.
These three factors are likely to continue which continue to constrain inventories over the next few years.
About Aaron Zapata, REALTOR
Aaron Zapata is a top-producing Real Estate Agent in Southern California and Broker-Owner of IMPACT Properties, Inc. He holds an MBA from Cal State Fullerton and a degree in Biblical and Theological Studies from BIOLA University. As a practicing Broker and Certified Residential Specialist (CRS), he has closed over $150,000,000 in sales and can identify with the current trends and difficulties agents and clients have. IMPACT Properties is recognized as a leading real estate firm in Southern California with offices in Orange and Los Angeles Counties representing both traditional sales and bank repos (REOs). If you’d like to contact Aaron or one of the IMPACT agents about selling or buying a home or improving your real estate career, you can email Aaron@ImpactProp.com or call (714) 660-2122. He’d love to hear from you.
IMPACT Properties is a premier real estate company located in Southern California with multiple offices in Orange and Los Angeles Counties. Their professional REALTORS® service home sellers and buyers with buying and selling homes, condos, land, apartments, and commercial properties all throughout the area. For more information you can visit www.ImpactProp.com.
Homes, Apartments, Light Industrial Commercial, Bank Repos, REOs, REIT Assets, and Shorts Sales